Commercial interest reference rate (CIRR)
The commercial interest reference rate (CIRR) is the minimum fixed interest rate that Participants to the OECD Arrangement must apply when providing official financing support for fixed-rate export credits. A CIRR is fixed for each Participant currency. The Arrangement states that CIRRs should represent final commercial lending rates in the domestic market of the currency concerned, correspond closely to rates for first-class domestic and foreign borrowers, reflect the funding cost of fixed-rate finance, and avoid distorting domestic competition.
CIRRs are calculated monthly and take effect on the 15th day of each month, applying until the 14th of the following month. Official financing support must not offset or compensate for the credit risk premium required under the Arrangement's premium articles; the CIRR floors interest, while the ECA premium prices non-repayment risk separately.
How the commercial interest reference rate is used on bank desks
On bank EF desks, the CIRR appears whenever a fixed-rate buyer credit or other officially supported fixed-rate loan is offered under Arrangement rules. Commercial banks often fund floating and rely on an interest make-up or interest equalisation scheme so the borrower receives a CIRR-linked fixed coupon while the bank's floating economics are stabilised by the official system.
Indicative pricing, offer letters and commitment documents therefore distinguish the CIRR maturity selected for the repayment profile from any holding-period add-ons when the rate is locked before the financial contract date. The sector understandings for civil aircraft and ships apply CIRR rules set out in their own annexes rather than the general Annex XII methodology.
Construction and application mechanics
Under Arrangement Article 18, Participants providing official financing support for fixed-rate loans shall apply the relevant CIRRs as minimum interest rates. Article 19 points to Annex XII for construction and application for Arrangement business other than the aircraft and ships sector understandings. The CIRR is composed of a base rate, computed from government bond yields, plus a margin.
The relevant government bond maturity is chosen from a formula based on the drawdown period and the repayment profile. For standard repayment profiles the form is drawdown period plus half the repayment period plus half the repayment frequency in years, rounded to the nearest year, floored at three years and capped at ten years. Additional costs apply when the CIRR is locked in and held prior to the date of the financial contract.
Published tables list rates by currency and by that selected bond maturity bucket. Desks read the table for the currency of denomination and the maturity bucket that matches the calculated horizon, then confirm whether any holding-period margin or national make-up mechanics apply on top of the published CIRR floor.
Boundaries and common misconceptions
The CIRR is a minimum for official fixed-rate support, not a required coupon for floating-rate facilities and not a substitute for premium. Pure cover transactions where the bank sets a floating commercial rate without official interest support are outside the CIRR floor, though premium rules may still apply. The CIRR also does not determine eligibility, national content or export credit agency product choice; those remain national mandate questions.